Once you’re earning money, the first thing you need to consider is how to grow it. Rather than simply waiting for the next paycheck as a source of income, you can start investing so that your money continues to grow.
One of the best tips that rings true to this day to be financially stable is to invest in real estate. Not only is it a good indicator that you’re putting your money in a place where it grows in value, it will also secure your future. Additionally, buying your own home is one way to increase your income stream, creating a passive and monthly income that isn’t volatile.
To start securing your financial stability, here are the top five reasons on why you need to own a home now:
1. Long-term financial security
When weighing your investment options, the most secure and stable way is real estate. Unlike in stocks where the market is volatile and you have a lot of external factors that can affect your gains, real estate provides solid and steady growth.
You have control over what you can do to maximise investment returns by renting, flipping, and more. Additionally, you can force appreciation by managing the property according to the target niche using interior design, increasing rent, and others. This means the potential profit on your property can escalate in a good way.
2. Value increases over time
The real estate market is consistently in demand. Meaning, it is always a smart idea to buy a property instead of renting since its value is bound to skyrocket over a couple of years.
3. Shelter your income from tax
It’s possible to lessen tax deductions if you own a property, whether you rent it or not. This is because you can write-off various costs like operation, maintenance or insurance in your tax declaration. Not only that but you can often deduct state property taxes and mortgage interest, allowing you to shelter your income and gains.
4. Build your portfolio
Financial stability is easier to achieve if you start building your investment portfolio. To start you off, real estate is considered a great asset to have since you’re ensured high returns with less risks. Additionally, you can secure property insurance so your tangible asset is better protected in case situations out of your control occur.
5. Various real estate investment options
Investing in real estate is not as cut and dry as just buying a house, waiting for the value to increase and selling at a later date. There are a variety of options available that allows you to maximise your investment, lessen risk, and in a way that works with your lifestyle.
Here are the top options you have when investing in real estate:
- Buy and wait → This is the traditional way to invest in real estate by buying a place and waiting for years for its value to appreciate before selling it.
- House hacking → To increase income, you can buy an apartment complex or a house with multiple bedrooms and rent them out. Whether you live in one unit or not of the property you bought, you can still generate income that will help you pay the mortgage.
- Vacation rentals → One way to increase your income stream is by buying a house or a condo to rent it on a short-term basis. Whether it’s for a night, a week, or even a month, it can still generate profit. Just make sure to properly decorate the house or condo you’ll buy to market it better to potential renters.
- Flipping houses → If you want a quick return of your investment at a higher value, then flipping houses is a great option. Just find an undervalued house, fix it according to the buyer you have in mind, and sell it. Flipping a house can take a couple of months depending on the niche of buyers you want but it is still a shorter time frame to gain profit with a higher return of what you invested.
Keep in mind though that you cannot randomly choose a cheap house and flip it because not all houses can appreciate quickly. One of the best ways to pick a house to flip is by finding a neighborhood that’s currently or will be upscaled since property values there are certain to increase.
There are numerous investment options out there that can help you secure financial stability. However, real estate is always the smart choice if you want less risks and high long term gains. While you have to wait for years for property value to increase, it’s a tangible asset that solidifies your portfolio and ensures passive income.
Make smart money decisions now to safeguard your income by investing in the right real estate property for you. Do not forget to check the market thoroughly and do your research so you can invest wisely!